Costa Rica central bank chief hits back at critics

Francisco de Paula Gutiérrez, president of Costa Rica's central bank, hit back at critics of the bank's monetary policy.

Friday, May 23, 2008

The system of bands that governs the exchange rate has been under fire, and the bank has been accused of fueling speculation and uncertainty by holding back information.
Gutiérrez said he would always use a maximum of clarity in applying the rules for the bank's intervention in the money markets. "But there are limits," he added.
The bank president said that market players were probably using guesswork with which to speculate. "We're transparent, but not ingenuous," he added.

More on this topic

5% jump in Costa Rica's currency raises eyebrows

July 2008

The tumble of 5 percent in Costa Rica's exchange rate in a single day has caused some observers to question the model of maintaining an exchange rate range, says Melizandro Quirós in a column in the web site Nacion.com.

Under this system, the external shocks are absorbed by the exchange rate, says Quirós.

Costa Rican central bank takes action to control surge in dollar

July 2008

The Costa Rican central bank, the BCCR, modified its exchange-rate policy in an effort to control a surge in the value of the US dollar on local money markets.

Under the country's currency-band system, the upper band (the maximum price at which the central bank sells dollars to intermediaries) has been set at 555.37 colons and will be increased daily by six céntimos.

Costa Rican central bank defends currency bands

June 2008

Amid growing criticism of the currency bands used to control the value of the colon, the Costa Rican central bank defended the system.

The bands are not an end in themselves, said the bank's president, Francisco de Paula Gutiérrez. Rather, they are a stage in the transition to a floating exchange rate.

Costa Rica central bank under fire from business leaders

May 2008

Costa Rica's central bank has become involved in a dispute with the private sector whose leaders accuse the financial authorities of failing to make clear how the new exchange-rate system will work.

Business leaders were unhappy with the central bank's intervention in the wholesale dollar market, and accused the bank's governor, Francisco de Paula Gutiérrez, of offering an explanation "that explains nothing".

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